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Wendy's Exits Japan Amid Stiff Competition

TOKYO--Hamburger restaurant Wendy's will close its doors in Japan as the local operator of the U.S. fast-food chain struggles with cutthroat competition.

Zensho Co.
7550 0.15%
, which runs 71 Wendy's burger shops mainly in Tokyo metropolitan area under a trademark accord, will terminate its hamburger chain franchise contract with the
Wendy's/Arby's Group Inc.
WEN 0.67%
Dec. 31, the company said Thursday.

With 60 regular employees and 1,900 part-time workers, Wendy's Japan racked up sales of 6.2 billion yen in the fiscal year ended March. Despite posting a profit in the previous fiscal year, Zensho has decided to focus its resources on other businesses such as its Sukiya beef bowl chain.

In Japan, the first Wendy's opened its doors in Tokyo's posh Ginza district in 1980. It was initially operated by supermarket chain
Daiei Inc.,
but Zensho acquired the operations of the burger business in 2002.

Larger U.S. rival McDonald's Holdings Co. (Japan) has been performing well in the Japanese market and has posted gains in store sales recently despite the economic slowdown. While its Y100 "one-coin" menu initially narrowed the firm's profit margin, it eventually became a hit and led to customers buying higher-priced items.